Merck KGaA Slides After Decision Not to Seek MS Approval

Film-coated tablets are inspected by machine at the Merck KGaA pharmaceutical plant in Darmstadt, Germany. Merck had already lost the race to get the first tablet against multiple sclerosis on the market after Novartis AG ’s Gilenya was approved last year in the U.S. Photographer: Hannelore Foerster/Bloomberg

June 22 (Bloomberg) -- Merck KGaA fell the most in three
months after the German drugmaker said it would no longer seek
approval for the multiple sclerosis pill cladribine as
regulators requested new clinical trials.

Merck had already lost the race to get the first tablet
against multiple sclerosis on the market after Novartis AG’s
Gilenya was approved last year in the U.S. Merck’s decision will
result in an exceptional charge of 20 million euros ($28.8
million) in the second quarter, the Darmstadt-based company said
in an e-mailed statement today.

“There’s no resurrection here,” Jack Scannell, an analyst
with Sanford C. Bernstein Ltd. in London, said in an interview.
“The resurrection wouldn’t have been terribly valuable, but
there was resurrection potential even with a delay.” Scannell
rates Merck’s shares “market perform.”

“At best we thought this drug could be salvaged in 2013
and 2014 and by then the impact on revenue would be minimal,”
he said. “The MS market would be much more competitive.”

Merck said it will continue ongoing cladribine trials.

“Attempting to fulfill the FDA and the EMA requirements
would necessitate the initiation of a new clinical trial program
which would take several years to complete,” Merck said in the
statement.